Labor Force Statistics from the Current Population Survey

Labor Force Statistics from the Current Population Survey

Characteristics of Minimum Wage Workers: 2005

According to Current Population Survey estimates for 2005, 75.6 million American workers were paid at hourly rates, representing 60.1 percent of all wage and salary workers.1 Of those paid by the hour, 479,000 were reported as earning exactly $5.15, the prevailing Federal minimum wage. Another 1.4 million were reported as earning wages below the minimum.2 Together, these 1.9 million workers with wages at or below the minimum made up 2.5 percent of all hourly-paid workers. Tables 1 - 10 present data on a wide array of demographic and socioeconomic characteristics for hourly-paid workers earning at or below the Federal minimum wage. The following are some highlights from the 2005 data.

Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and about one-fourth of workers earning at or below the minimum wage were age 16-19. Among employed teenagers, about 9 percent earned $5.15 or less. About 2 percent of workers age 25 and over earned the minimum wage or less. Among those age 65 and over, the proportion was about 3 percent. (See table 1 and table 7.)

Less than 3 percent of white hourly-paid workers earned $5.15 or less. Among black, Asian, and Hispanic hourly-paid workers, about 2 percent earned the Federal minimum wage or less. For whites and Hispanics, women were twice as likely as men to earn $5.15 or less. (See table 1.)

Never-married workers, who tend to be young, were more likely to earn the minimum wage or less than married workers. (See table 8.)

Among hourly-paid workers age 16 and over, 2 percent of those who had a high school diploma but had not gone on to college earned the minimum wage or less. (See table 6.)

Part-time workers (persons who usually work less than 35 hours per week) were more likely than their full-time counterparts to be paid $5.15 or less (about 6 percent versus 1 percent). (See table 1 and table 9.)

By occupational group, the highest proportion of workers earning at or below the Federal minimum wage occurred in service occupations, at about 8 percent. About three in four workers earning $5.15 or less in 2005 were employed in service occupations, mostly in food preparation and service jobs. The proportion of hourly-paid workers whose earnings were reported at or below $5.15 was lowest for persons employed in management, professional, and related occupations and natural resources, construction, and maintenance occupations (less than 1 percent for both). (See table 4.)

The industry with the highest proportion of workers with reported hourly wages at or below $5.15 was leisure and hospitality (about 14 percent). About three-fifths of all workers paid at or below the Federal minimum wage were employed in this industry, primarily in the food services and drinking places component. For many of these workers, tips and commissions supplement the hourly wages received. (See table 5.)

Among the states, Oklahoma and West Virginia had the highest proportion of hourly-paid workers earning at or below $5.15 (at about 4 percent). Alaska, California, and Washington had the lowest proportion earning the minimum wage or less (less than 1 percent). It should be noted that some states have minimum wage laws establishing minimum wage standards that exceed the Federal level of $5.15 per hour. (See table 2 and table 3.)

The proportion of hourly-paid workers earning the prevailing Federal minimum wage or less has trended downward since 1979, when data first began to be collected on a regular basis. (See table 10.)

Source: U.S. Department of Labor, Bureau of Labor Statistics. Bureau of Labor Statistics' data on minimum wage earners are derived from the Current Population Survey (CPS), a nationwide sample survey of households that includes questions enabling the identification of hourly-paid workers and their hourly wage rate. Data in this summary are 2005 annual averages.

1 Data are for wage and salary workers, excluding the incorporated self-employed, and refer to earnings on a person's sole or principal job.

2 It should be noted that the presence of a sizable number of workers with reported wages below the minimum does not necessarily indicate violations of the Fair Labor Standards Act, as there are exemptions to the minimum wage provisions of the law. Indeed, the relatively large number of workers with reported wages below the minimum in 2005 includes about 300,000 hourly-paid workers reported as earning exactly $5.00 per hour; to some extent, this may reflect rounding in the responses of survey participants. The estimates of the numbers of minimum and subminimum wage workers presented in the accompanying tables pertain to workers paid at hourly rates; salaried and other non-hourly workers are excluded. As such, the actual number of workers with earnings at or below the prevailing minimum is undoubtedly understated. Research has shown that a relatively smaller number and share of salaried workers and others not paid by the hour have earnings that, when translated into hourly rates, are at or below the minimum wage. However, BLS does not routinely estimate hourly earnings for non-hourly workers because of data concerns that arise in producing these estimates. For further information, see
Steven Haugen and Earl Mellor, "Estimating the number of minimum wage workers," Monthly Labor Review, January 1990 (PDF 415K).